Fact Sheets

Fiscal Year (FY) 2022 Skilled Nursing Facility Prospective Payment System Proposed Rule (CMS 1746-P)

On April 8, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility (SNF) prospective payment system (PPS) for fiscal year (FY) 2022. In addition, the proposed rule includes proposals for the SNF Quality Reporting Program (QRP), and the SNF Value-Based Program (VBP) for FY 2022. CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for SNFs on an annual basis. This fact sheet discusses the major provisions of the proposed rule.

FY 2022 Proposed Updates to the SNF Payment Rates  

CMS estimates that the aggregate impact of the payment policies in this proposed rule would result in an increase of approximately $444 million in Medicare Part A payments to SNFs in FY 2022. This estimate reflects a $445 million increase from the update to the payment rates of 1.3 percent, which is based on a 2.3 percent SNF market basket update, less a 0.8 percentage point forecast error adjustment and a 0.2 percentage point multifactor productivity (MFP) adjustment, and a $1.2 million decrease due to the proposed reduction to the SNF PPS rates to account for the recent blood-clotting factors exclusion (see below). These impact figures do not incorporate the SNF VBP reductions that are estimated to be $184.25 million in FY 2022.

Methodology for Recalibrating the PDPM Parity Adjustment

On October 1, 2019, CMS implemented a new case-mix classification model, called the Patient Driven Payment Model (PDPM). When finalizing PDPM, CMS stated that this new payment model would be implemented in a budget neutral manner, meaning that the transition to this new payment model would not result in an increase or decrease in aggregate SNF spending. Since PDPM implementation, currently available data suggest an unintended increase in payments of approximately 5 percent, or $1.7 billion in FY 2020. As with past payment model transitions, CMS has conducted the data analysis to recalibrate the parity adjustment used to achieve budget neutrality under PDPM. However, CMS also acknowledges that the COVID-19 PHE could have affected the data used to perform these analyses. Accordingly, in this proposed rule, CMS is soliciting broad public comments on a potential methodology for recalibrating the PDPM parity adjustment that would account for the potential effects of the COVID-19 PHE without compromising the accuracy of the adjustment. CMS also seeks comment on whether any necessary adjustment should be delayed or phased in over time to provide payment stability.

Rebase and Revise the SNF Market Basket

CMS is proposing to rebase and revise the SNF market basket to improve payment accuracy under the SNF PPS by proposing to use a 2018-based SNF market basket to update the PPS payment rates, instead of the 2014-based SNF market basket.

Section 134 of the Consolidated Appropriations Act, 2021  – New Blood Clotting Factor Exclusion from SNF Consolidated Billing 

Section 134 in Division CC of the Consolidated Appropriations Act, 2021  (Pub.L.116-260, enacted December 27, 2020) requires that certain specified blood clotting factors used for the treatment of patients with hemophilia and other bleeding disorders and items and services related to the furnishing of such factors under section 1842(o)(5)(C) of the Act be excluded from the consolidated billing requirements under the SNF PPS for items and services furnished on or after October 1, 2021. As a result, CMS is proposing a proportional reduction in the Medicare Part A SNF rates to account for this new exclusion as required by section 1888(e)(4)(G)(iii) of the Social Security Act. This proposed methodology, if finalized, would result in an estimated decrease of approximately $1.2 million in aggregate Part A SNF spending. We would note that this proposed reduction in Part A SNF spending is intended to offset the increase in Part B spending that will occur due to these items and services being excluded from SNF consolidated billing.

Proposed changes in PDPM ICD-10 Code Mappings 

PDPM utilizes International Classification of Diseases, Version 10 (ICD-10) codes in several ways, including to assign patients to clinical categories used for categorization under several PDPM components, specifically the PT, OT, SLP and NTA components. The ICD-10 code mappings and lists used under PDPM are available on the PDPM Website at https://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/SNFPPS/PDPM. In response to stakeholder feedback and to improve consistency between the ICD-10 code mappings and current ICD-10 coding guidelines, CMS is proposing several changes to the PDPM ICD-10 code mappings affecting the areas of sickle-cell disease, esophageal conditions, multisystem inflammatory syndrome, neonatal cerebral infarction, vaping-related disorder, and anoxic brain damage.

Skilled Nursing Facility Quality Reporting Program (SNF QRP) update

The SNF QRP is a pay-for-reporting program. SNFs that do not meet reporting requirements may be subject to a two-percentage point (2%) reduction in their annual update. CMS is proposing to adopt two new measures and update the specifications for another measure. In addition, CMS is proposing a modification to the public reporting of SNF quality measures as well as seeking comment on two Requests for Information (RFI).

Closing the Health Equity Gap - RFI

Consistent with Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, CMS is committed to addressing the significant and persistent inequities in health outcomes in the United States through improving data collection to better measure and analyze disparities across programs and policies. CMS is working to make healthcare quality more transparent to consumers and providers, enabling them to make better choices as well as promoting provider accountability around health equity. We are seeking feedback in this RFI on ways to attain health equity for all patients through policy solutions. Our ongoing commitment to closing the health equity gap in SNFs has been demonstrated by the adoption of standardized patient assessment data elements (SPADEs) which include several social determinants of health (SDOH) that were finalized in the FY 2020 SNF PPS final rule for the SNF QRP (84 FR 38805 through 38817). With this RFI, we are also seeking comment on the possibility of expanding measure development, and the collection of other SPADEs that address gaps in health equity in the SNF QRP.

Skilled Nursing Facility (SNF) Healthcare-Associated Infections (HAI) Requiring Hospitalization Measure

CMS is proposing the adoption of a new claims-based measure, SNF HAI, to the SNF QRP, beginning with the FY 2023 SNF QRP. Typically, HAIs result from inadequate patient management following a medical intervention, such as surgery or device implementation, or poor adherence to protocol and antibiotic stewardship guidelines. Several provider characteristics are also related to HAIs including staffing levels (for example, high turnover, low staff-to-resident ratios, etc.), facility structure characteristics (for example, national chain membership, high occupancy rates, etc.), and adoption or lack thereof of infection surveillance and prevention policies.

The proposed SNF HAI measure uses Medicare fee-for-service (FFS) claims data to estimate the rate of HAIs that are acquired during SNF care and result in hospitalization.  Some of the HAIs identified in this measure include sepsis, urinary tract infection, and pneumonia. The goal of the measure is to be able to assess those SNFs that have notably higher rates of HAIs that are acquired during SNF care and result in hospitalization, when compared to their peers and to the national average HAI rate. Implementation of the SNF HAI measure provides information about a facility’s adeptness in infection prevention and management and encourages improved quality of care.

COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) Measure

CMS is proposing the adoption of the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) Measure beginning with the FY 2023 SNF QRP.  This measure would require SNFs to report on COVID-19 HCP vaccination in order to assess whether SNFs are taking steps to limit the spread of COVID-19 among their HCP, reduce the risk of transmission within their facilities and help sustain the ability of SNFs to continue serving their communities throughout the COVID-19 PHE and beyond. Under this proposal, SNFs would report the vaccination data through the Centers for Disease Control and Prevention National Healthcare Safety Network beginning October 1, 2021.

Transfer of Health (TOH) Information to the Patient-PAC Quality Measure

CMS is proposing to update the denominator for the Transfer of Health (TOH) Information to the Patient-Post Acute Care (PAC) quality measure. Currently the measure denominators for both the TOH Information to the Patient-PAC and the TOH Information to the Provider-PAC measures include patients discharged home under the care of an organized home health service organization or hospice. In order to avoid counting the patient in both TOH measures, CMS is proposing to remove this location from the definition of the denominator for the TOH Information Patient–PAC measure.

Public Reporting of Quality Measures with Fewer than Standard Numbers of Quarters Due to COVID-19 Public Health Emergency (PHE) Exemptions

In March 2020, due to the COVID-19 PHE, CMS granted an exception to the SNF QRP reporting requirements from Q1 2020 (January 1, 2020–March 31, 2020), and Q2 2020 (April 1, 2020–June 30, 2020). CMS also stated that it would not publicly report any SNF QRP data that might be greatly impacted by the exceptions from Q1 and Q2 of 2020. This exception affected the standard number of quarters that CMS currently uses to display SNF QRP data. CMS is proposing to update the number of quarters used for public reporting to account for this exception.

Fast Healthcare Interoperability Resources (FHIR) in support of Digital Quality Measurement in Quality Reporting Programs - RFI

CMS is working to further the mission to improve the quality of healthcare for beneficiaries through measurement, transparency, and public reporting of data. The SNF QRP and CMS’ other quality programs are foundational for contributing to improvements in health care, enhancing patient outcomes, and informing consumer choice. We believe that advancing our work with use of the FHIR standard offers the potential for supporting quality improvement and reporting which will improving care for our beneficiaries. We are seeking feedback on our future plans to define digital quality measures (dQMs) for the SNF QRP. We also are seeking feedback on the potential use of FHIR for dQMs within the SNF QRP aligning where possible with other quality programs.

Skilled Nursing Facility Value-Based Purchasing (SNF VBP) Program

Proposal to suppress the SNF readmission measure in the SNF VBP Program

CMS is proposing to suppress the SNF 30-Day All-Cause Readmission Measure for the FY 2022 SNF VBP Program Year because circumstances caused by the COVID-19 PHE have affected the measure and the resulting performance scores significantly.  Specifically, to address the possible distortion of performance scores and incentive payment multipliers, CMS is proposing to assign a performance score of zero to all participating SNFs, irrespective of how they perform using the previously finalized scoring methodology.  Then, to maintain compliance with the existing payback percentage policy (per statute, the SNF VBP Program must withhold 2% of SNF Medicare Part A FFS payment and redistribute 50–70% of the withhold to SNFs in the form of incentive payments), CMS is proposing to reduce the otherwise applicable federal per diem rate for each SNF by two percent and award SNFs 60% of that withhold, resulting in a 1.2% payback percentage to those SNFs, except for SNFs that are subject to the Low Volume Adjustment policy.

The proposed measure suppression does not remove the accountability of SNFs and nursing facilities (hereafter referred to as long-term care facilities [LTCFs]) to provide high quality care and ensure patient safety, including protecting the well-being of clinical staff who provide care in these congregated settings.  LTCFs must continue to adhere to evidence-based infection control practices and CMS’ Requirements for Participation. Compliance with CMS’ requirements is critical as nursing home residents are more susceptible to severe infection from COVID-19 due to their age, underlying health conditions, and congregated setting.

Expanded SNF VBP Program

The Consolidated Appropriations Act, 2021 included a provision allowing the Secretary to expand the SNF VBP program and apply up to ten measures with respect to payments beginning in FY 2024, which may include measures of functional status, patient safety, care coordination, or patient experience. CMS is soliciting input from stakeholders on which quality measures should be considered under an expanded SNF VBP.  

In expanding the SNF VBP measure set, CMS is also considering measures that we already require for Long-Term Care Facilities (LTCFs), which include both SNFs and nursing facilities (NFs), to collect and report under other initiatives such as Nursing Home Compare.  Approximately 94 percent of LTCFs are dually certified as both a SNF and NF, and the vast majority of LTCF residents are also Medicare beneficiaries. The expanded SNF VBP measure set would assess the quality of care that LTCFs provide to all LTCF residents, regardless of payer, as it would best represent the quality of care provided to all Medicare beneficiaries in the facility.  Specifically, CMS seeks comments on the measures listed in the proposed rule, including measures to assess residents’ views of their healthcare and measures assessing staff turnover.

For more information:

The proposed rule will be displayed April 8, 2021, at the Federal Register’s Public Inspection Desk and will be available under “Special Filings,” at http://www.federalregister.gov/inspection.aspx.

###